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Food delivery aggregator Food Panda has been accused of levying an inflated Value Added Tax on their bills. And last week, the Delhi High Court directed the NCR Government to look into the matter.
Justice Rajiv Sahai Endlaw passed the order in a writ petition filed by two final year students from National Law University Delhi.
While ordering via the service on separate occasions, Pranav Jain and Aroon Menon noticed that they were being charged VAT on the sub-total along with the service tax amount.
This is contrary to what is mandated under the Delhi Value Added Tax Act of 2004.
The petition states:
“Instead of calculation of VAT on sub-total, VAT was being calculated on an inflated base which included sub-total and the amount of service tax. The same is in clear violation of Sections 3 and 4(1)(e) r/w Section 2(1)(zd) of the Delhi Value Added Tax Act, 2004 and leads to a cascading effect where the service element already taxed by the Union of India under the provisions of the Finance Act, 1994 is taxed yet again by Respondent No. 2 and the excess tax is presumably paid to Respondent No. 1.”
The duo, who recently launched an online tax calculator called Kitnatax, proceeded to write letters to the Department of Trade and Taxes, but to no avail. This prompted them to file a writ in the Delhi High Court, with Senior Advocate P Chidambaram appearing pro bono, along with Advocate Naman Joshi.
The Department of Trade and Taxes has been given three weeks to investigate the matter.
Read the complete writ petition here: